The Securities and Exchange Commission confirmed Tuesday that its official Twitter account was compromised, leading to the posting of an unauthorized tweet falsely stating that Bitcoin exchange-traded fund applications had been approved. 

The compromised tweet, which was posted at about 4:12 p.m. ET and has now been retracted by the SEC, falsely indicated the SEC had approved the listing and trading of spot Bitcoin (CRYPTO: BTC) ETFs, a subject of intense debate and anticipation in the financial markets.

SEC Chair Gary Gensler addressed the misinformation, clarifying in a tweet on his account that no such approval had been granted.

This security breach comes at a crucial juncture when the SEC is closely scrutinizing proposals for Bitcoin ETFs.

When asked to comment, a SEC spokesperson told Benzinga in an email: "The SEC's @SECGov X/Twitter account has been compromised. The unauthorized tweet regarding Bitcoin ETFs was not made by the SEC or its staff."

To date, the SEC has been cautious, citing concerns over potential market manipulation, investor protection and the lack of consistent and robust regulatory frameworks in the cryptocurrency space.

The price of Bitcoin experienced a sudden surge to $47,600 following the false announcement Tuesday, only to decline to approximately $45,500 once the news was confirmed to be fraudulent.

Traditional exchange-traded funds track an index or a basket of assets but do so through traditional financial markets.

Also Read: EXCLUSIVE: Bitcoin ETFs On The Horizon - It's 'The Most Important Thing,' Says Bitwise CIO

In contrast, spot Bitcoin ETFs would directly track the price of Bitcoin, bringing cryptocurrencies closer to mainstream financial markets.

Advocates argue that this integration would provide easier access and more robust protection for investors interested in Bitcoin.

The SEC has hesitated to approve such products.

Previously, the agency rejected multiple applications from about 13 firms, citing concerns about the potential for fraud and manipulation in the Bitcoin market.

The unauthorized tweet, therefore falsely suggesting SEC approval, has added a layer of complexity to an already intricate narrative.

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Illustration created using Shutterstock photo.